Rising COVID-19 Rates Send NatWest Misselling Trial To Video

By Bonnie Eslinger
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Law360, London (October 15, 2020, 5:01 PM BST) -- A London judge ruled Thursday that a trial next week would be held remotely for a British nursing home's misselling claims against National Westminster Bank amid increasing uncertainty that stricter COVID-19 restrictions could be imposed.

In making her decision, High Court Judge Kelyn Bacon set aside concerns expressed by counsel for Fine Care Homes Ltd. about potential difficulties. Setting up a hybrid hearing, with some parties participating via video conference and others in court, didn't make sense with the possibility of new coronavirus rules looming, she said. The trial is scheduled to start Thursday, Oct. 22.

"We might as well go fully remote, especially given that we don't know what the situation we're going to be in with the lockdown," Judge Bacon said. "It seems likely that there will be more stringent measures introduced over the course in the next several weeks. There's not going to be a sudden releasing of the lockdown for everyone, the direction of travel is quite clear."

The judge also asked that the court be provided electronic versions of documents on a USB storage device, in addition to hard copies, in case she is required to work from home as a result of the pandemic.

The nursing home's claims against the bank relate to an interest-rate "hedging" product that the lender sold the nursing home back in 2007, in connection with a five-year, £4 million ($5.1 million) loan. Fine Care Homes claims in its suit that banking officials provided it with negligent advice on what it was buying and misrepresented the terms.

NatWest is one of several High Street banks the Financial Conduct Authority ordered to set up an independent review to assess whether "unsophisticated" customers were missold hedging products that they didn't understand. Banks were also ordered to address customers' complaints, which included changing the hedging agreement terms, or, in some cases, paying out compensation. The nursing home first issued a claim against the bank in 2013, but the proceedings were stayed under the review process.

During Thursday's hearing, which was held by video-conference, First Care Home's counsel, Brian Hurst of 39 Square, questioned whether, "in all the circumstances, the interest of justice requires [the trial] to go ahead now," and said he was uneasy at the prospect of a fully remote trial due to the potential for technical difficulties.

"Even in the course of this hearing you have broken up and frozen twice when I've been speaking to you on the screen," Hurst said. "The system really does not work as satisfactorily as its been held out."

The judge said she was not experiencing any technical difficulties and suggested it might be problems with the lawyer's internet connection. Hurst could come and use the courtroom and its Wi-Fi during the trial to ensure a good connection, she said.

Even if the trial experiences some technical disruptions, the judge said it should go ahead remotely, rather than be postponed.

"We simply do not know when we are going to be in a position to have fully in person hearings again," Judge Bacon said. "It may not be until next year, and I'm very reluctant to postpone the hearing until next year when everyone is ready to go now."

Hurst pressed, saying that ongoing technical difficulties could put his client at a disadvantage and asked that the court provide more time than the allotted seven-day window for the trial if need be.

"That is my main concern, we're going to be under pressure and the bank tactically is going to put us under pressure in relation to timing," he said.

The judge said extra time would be given if needed, but added, "I've been doing remote hearings all summer and I've never had one that has overrun."

In April, a different judge ordered NatWest to give the nursing home claimants a copy of a Financial Conduct Authority review into complaints that the interest rate swaps sold by the bank were unaffordable.

NatWest was also forced to disclose a compliance manual its sales staff followed at the time, as well as expert evidence analyzing, among other issues, its business relationship with Fine Care Homes Ltd.

During a March hearing in the case, Hurst argued that the bank must explain why it sold an interest rate swap when its own internal calculations supposedly flagged the possibility that his client's business would default on its payments. Lawyers for NatWest countered that the nursing home's director knew what he was signing up for when he took out money to grow the company's business.

On Thursday, Health Secretary Matt Hancock told the House of Commons that new restrictions will be imposed in London starting on Saturday to prevent rising coronavirus rates.

The nursing home is represented by Brian Hurst of 39 Square, instructed by Rowberry Morris.

The bank is represented by Edward Levey QC of Fountain Court Chambers, instructed by Dentons UK and Middle East LLP.

The case is Fine Care Homes Ltd. v. National Westminster Bank PLC, case number HC-2013-000598, in the High Court of Justice of England and Wales.

--Additional reporting by Christopher Crosby. Editing by Alyssa Miller.

For a reprint of this article, please contact reprints@law360.com.

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